Malaysia is considering a nationwide ban on foreign-registered vehicles purchasing subsidised RON95 petrol, as the government moves to tighten controls and reduce ongoing fuel subsidy leakages. The proposal, which could take effect from April 1, would directly affect vehicles registered outside Malaysia, including those from Singapore that regularly cross the border.
The move was revealed by Malaysia’s Domestic Trade and Cost of Living Minister Armizan Mohd Ali, who said new regulations are being drafted under the Control of Supplies Act 1961. These changes are intended to strengthen enforcement by explicitly prohibiting both the sale and purchase of RON95 petrol by foreign vehicles, rather than placing responsibility solely on petrol station operators.
Currently, enforcement action can only be taken against petrol station operators who sell subsidized RON95 to foreign-registered vehicles. Vehicle owners themselves are not directly liable under existing rules. Malaysian authorities believe this gap has limited the effectiveness of enforcement efforts, particularly in border areas where cross-border fuel purchases remain common due to price differences.
CLOSING REGULATORY GAPS IN FUEL SUBSIDY CONTROL
Under the proposed framework, legal action could be taken not only against petrol stations but also against drivers of foreign-registered vehicles who purchase or use subsidised RON95. The government says this would create clearer accountability and serve as a stronger deterrent against misuse of fuel subsidies.
The proposal comes despite the rollout of targeted subsidy schemes such as BUDI95, which were designed to ensure subsidised petrol reaches eligible Malaysian motorists. According to the ministry, leakages continue to be detected under existing distribution programmes, especially at petrol stations located near land borders.
Officials say the government remains committed to protecting public funds, particularly as fuel subsidies represent a significant portion of national expenditure. With rising global oil prices and cost-of-living pressures, ensuring subsidies benefit intended recipients has become a key policy priority.
HOW ENFORCEMENT MAY BE STRENGTHENED
To support the proposed ban, Malaysia plans to enhance monitoring through data analytics, focusing on petrol stations with unusual sales patterns. Authorities will analyse RON95 and diesel transaction data, especially in border regions, to identify repeated or suspicious purchases linked to foreign vehicles.
Additional measures under consideration include stricter inspections at petrol stations, limits on fuel purchases outside vehicle tanks without special permits, and mandatory logbooks at stations near border crossings. These steps are aimed at reducing opportunities for manipulation and improving traceability.
Recent incidents have also added urgency to the proposal. In one case, a Singapore-registered car was reportedly found using an altered licence plate to purchase subsidised fuel. Such cases have fuelled public calls for tougher penalties, including proposals by Malaysian lawmakers to temporarily bar offending foreign vehicles from entering the country.
For Singapore motorists, the potential ban underscores the importance of compliance when driving across the border. While Malaysian RON95 petrol prices remain significantly lower due to subsidies, foreign drivers are expected to use higher-priced unsubsidised fuel. As regulations tighten, authorities on both sides of the Causeway are signalling that enforcement around fuel purchases will only become more robust.